What do the names Intermediate-Term and Short-Term Corporate Bond ETF indicate?

These terms refer to the average time until the bonds in the portfolio mature. VCIT (Vanguard Intermediate-Term Corporate Bond ETF) holds bonds with longer maturities than VCSH (Vanguard Short-Term Corporate Bond ETF). This difference affects how each fund reacts to changes in interest rates. Understanding the duration helps investors grasp the potential volatility and yield profile associated with each fund, as longer-term bonds typically offer different risk-return trade-offs compared to shorter-term options.

Why is the expense ratio important for corporate bond investors?

The expense ratio is an annual fee deducted from the fund's assets. For bond funds like VCIT and VCSH, which aim for steady income rather than high capital growth, costs significantly impact net returns. Both Vanguard ETFs listed here have identical expense ratios of 0.03%. This low cost structure means that more of the gross interest received from the underlying bonds remains in the investor's pocket, making fees less of a differentiating factor between these two specific funds.

What does net assets represent in these ETF comparisons?

Net assets refer to the total market value of the securities held by the ETF, minus liabilities. It is a measure of the fund's size. VCIT has net assets of $68.3 billion, while VCSH holds $44.3 billion. Generally, larger funds may offer better liquidity, meaning easier buying and selling without affecting the price. These figures indicate that both funds are substantial and widely used, though VCIT is currently larger by this metric.

How do the dividend yields of VCIT and VCSH differ?

VCIT currently offers a higher dividend yield of 4.97% compared to VCSH's 4.53%. This difference reflects the market's compensation for time value; investors typically receive more income for holding bonds that mature later, as seen with VCIT's intermediate-term focus. VCSH's lower yield is characteristic of short-term bonds, which generally provide less income but may offer greater stability during interest rate fluctuations. The spread of 0.44 percentage points highlights the trade-off between income generation and duration exposure.

What is interest rate risk in the context of these bond ETFs?

Interest rate risk refers to the potential for bond prices to fall when interest rates rise. Generally, funds with longer average maturities, like VCIT (Vanguard Intermediate-Term Corporate Bond ETF), are more sensitive to these changes than funds with shorter maturities like VCSH (Vanguard Short-Term Corporate Bond ETF). If rates increase, the value of the older, lower-yielding bonds held by VCIT may drop more sharply than those held by VCSH, affecting the ETF's share price alongside its income stream.

How are ETF distributions different from regular dividends?

ETFs like VCIT and VCSH collect interest payments from the bonds they own. These payments are passed on to shareholders as distributions, often referred to as dividends. Unlike stock dividends, which come from corporate profits, these distributions primarily represent interest income earned on the underlying debt securities. The frequency and amount depend on the specific cash flows from the bonds within the portfolio. It is important to distinguish this income source when evaluating the total return of corporate bond ETFs.

How similar are the top holdings of VCIT and VCSH?

Comparing the specific top holdings reveals no overlap between the listed top ten positions of VCIT and VCSH. This indicates that despite both being Vanguard corporate bond ETFs with similar expense ratios, they track different segments of the bond market. The lack of shared top holdings underscores that VCIT focuses on intermediate-term corporate debt while VCSH concentrates on short-term corporate debt, resulting in distinct portfolio compositions that serve different duration objectives.

What sectors do these corporate bond ETFs primarily invest in?

Both VCIT and VCSH invest in corporate bonds, meaning they lend money to companies rather than governments. However, specific sector weights are not available for either fund in the current data. Corporate bond portfolios typically diversify across various industries such as technology, financials, healthcare, and industrials. Without detailed sector breakdowns, investors understand that they are exposed to the general corporate credit market, but the precise industry distribution within each fund remains undisclosed in this comparison.

How do market conditions affect short-term versus intermediate-term bonds?

In a rising interest rate environment, shorter-duration bonds like those in VCSH may be less impacted by price declines compared to intermediate-term bonds in VCIT. Conversely, when rates fall, VCIT's longer duration might offer greater potential for capital appreciation. Market expectations of future monetary policy directly influence these dynamics. Investors often shift between these fund types depending on their outlook for interest rate movements, balancing yield opportunities against potential volatility in bond prices.

Which fund might suit an investor seeking higher current income?

Based on the data provided, VCIT offers a higher dividend yield of 4.97% compared to VCSH's 4.53%. An investor prioritising immediate income generation over lower duration risk might find VCIT's higher payout attractive, assuming the yield remains stable. This higher income compensates for the additional interest rate risk associated with holding intermediate-term bonds. However, the choice depends on the individual's tolerance for price fluctuations relative to the steady cash flow received from the higher yield.

Why do index tracking details matter for these ETFs?

Index tracking methods determine which bonds are included and how they are weighted. For VCIT and VCSH, the specific index tracked is not available for review. This limits the ability to verify the exact construction rules, such as credit quality thresholds or maturity bands. Understanding the index methodology helps investors know how the fund replicates the market segment, ensuring the portfolio aligns with expectations for corporate bond exposure and duration management.

What should investors know before comparing these ETFs?

This comparison provides an educational overview of VCIT and VCSH, focusing on fees, yields, and asset sizes as of the provided date. It is not financial advice. Investors should consider their own risk tolerance, time horizon, and investment goals. Since specific holdings and sector weights are not available here, users should consult official fund prospectuses for complete transparency on credit risks and portfolio construction before making any investment decisions.

VCIT vs VCSH

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare VCIT and VCSH side by side. This page reviews fees, holdings, dividends and how each Vanguard corporate bond ETF tracks its market segment. Both funds share identical 0.03% expense ratios and launched in November 2009. Explore key differences in net assets, yields and portfolio focus. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

VCIT

Metric

VCSH

0.03%

Expense Ratio

0.03%

4.97%

Dividend Yield

4.53%

$68.27B

Net Assets

$44.25B

2,329

Holdings

3,032

Nov 19, 2009

Inception Date

Nov 19, 2009

–

Index Tracked

–

Corporate Bond

Fund Category

Short-Term Bond

Both funds charge the same annual fee.

Shared Top Holdings

These funds do not share any of their top holdings.

Discover More Comparisons

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ICSH vs VCSH

Compare ICSH and VCSH ETFs. Review 0.08% vs 0.03% expense ratios, 4.17% vs 4.53% yields, and holding data. Note: index tracking details are currently not avail.

BSV vs VCSH

Compare BSV and VCSH on fees, assets, and yields. Both have 0.03% expense ratios. Note that top holdings and index tracking data are not available.

Investment Analysis

VCIT

Pros

VCIT offers a low expense ratio of 0.03% for broad corporate bond exposure.
It provides a higher dividend yield of 4.97% compared to its short-term counterpart.
With $68.3 billion in net assets, the fund benefits from significant liquidity and scale.

Considerations

The specific index tracked by VCIT is not available for detailed methodology review.
Top holdings and sector weights are not available, limiting transparency on concentration risks.
As an intermediate-term fund, it carries greater interest rate risk than short-duration alternatives.

VCSH

Pros

VCSH maintains a competitive expense ratio of 0.03% for short-term corporate debt.
It offers a solid dividend yield of 4.53% with lower duration exposure.
Net assets of $44.3 billion support strong trading liquidity and institutional adoption.

Considerations

Information on the specific index tracked is not available for verification.
Top holdings and sector weights are not available, restricting visibility into credit risk.
The dividend yield is lower than VCIT's, reflecting reduced compensation for short-term holdings.

About VCIT and VCSH

VCIT (VCIT)

The Vanguard Intermediate-Term Corporate Bond ETF (VCIT) aims to track the performance of the US investment-grade corporate bond market, focusing on bonds with an average duration of roughly 3 to 10 years. With a low expense ratio of 0.03%, it offers investors broad exposure to thousands of high-quality companies. The fund holds around 2,329 securities, providing diversification across various industries. It currently offers a dividend yield of approximately 4.97%, which can be attractive for income-seeking investors. However, like all bond funds, VCIT is sensitive to changes in interest rates; rising rates can cause the fund's value to fall. While it provides steady income potential, investors should remember that capital is at risk, and returns are not guaranteed. It is a core holding option for those seeking diversified corporate credit exposure.

VCSH (VCSH)

The Vanguard Short-Term Corporate Bond ETF aims to provide investors with a low-cost way to gain exposure to short-term, investment-grade corporate bonds. With a net asset value of USD 44.25 billion and an expense ratio of just 0.03%, it emphasises cost efficiency for long-term investors. The fund holds over 3,000 bonds, offering diversification across various issuers. While it has historically provided a dividend yield of 4.53%, potential investors should note that bond values and yields can fluctuate. This ETF might suit those seeking moderate income and lower volatility than longer-term bond funds, though returns are not guaranteed and are subject to market risks.

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VCIT vs VCSH

Fund Snapshot